TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 123
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....ch for ease of reference, we shall call "Swami Samarth Nagar." The Company Law Board has, pending the disposal of the said company application, where the main relief sought is to implead the appellants as party respondents, restrained the appellants from alienating or creating 3rd party rights over the Swami Samarth Nagar property and directed the appellants to maintain status-quo. Therefore, as on date, it is alleged that though the appellants are not parties to the company petition pending before the Company Law Board but an order has been passed whereby the appellants are restrained from alienation or creating 3rd party rights over Swami Samarth Nagar property. 2. The main company petition pending before the Company Law Board was filed by respondent nos.1 & 2. Respondent nos.3, 4 & 5 are the original respondent nos.1, 2 & 3 in the company petition. Except the appellants and respondent nos.1 & 2 nobody else appeared today. The petition pending before the Company Law Board has been filed by the respondent nos.1 & 2, alleging oppression and mis-management against respondent nos.4 & 5 in the conduct of affairs of respondent no.3-company, invoking the jurisdiction of the Company Law....
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.... Directors of the Company save and except those who are directors as on the date on the Board of the Company." 3. On 5.5.2015 the Advocates for the respondent nos.1 & 2 herein addressed a letter to the appellants and the other respondents herein recording that the respondents 1 & 2 have learnt that respondent no.4 has, without any authorization from the Board of Directors or shareholders of respondent no.3, sought to create/grant/transfer rights in respect of the property owned by respondent no.3-company viz. Swami Samarth Nagar Property and put them on notice that any creation or grant or transfer of rights in respect of Swami Samarth Nagar property in favour of the appellants was illegal and void and not binding on respondent no.3 or shareholders and the documents executed by respondent no.4 in favour of the appellants for such creation or grant or transfer are invalid and do not bind respondent no.3-company. 4. Pursuant to the order dated 16.4.2015, the respondent no.4 herein filed an affidavit dated 6.5.2015 in which the respondent no.5 has stated that the development rights in respect of the Swami Samarth Nagar property has been entrusted to the appellants pursuant to a reg....
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....graph-1 above. The Company Law Board on an urgent application taken out by respondent nos.1 & 2 herein after hearing the parties, passed the order dated 18.8.2015 which is impugned in this appeal, of which paragraphs-10, 11, & 12 read as under :- "10. For having the petitioner alleged that the value of the property is no way close to the real value of the property, for having alleged that R2 caused it transferred to Magnum without notice to the petitioners, and there being an order from CLB that the petitioners are entitled to implead Magnum as party to the proceeding, this Application is maintainable. 11. On seeing the company accounts, it is evident that there is no entry showing that the money of Rs. 9,51,00,000/- shown as consideration to the company property has not come into the accounts of the company, therefore, for time being it is to be understood that no money has come into the company showing it as consideration to Swami Samarth Property. 12. For having this Bench already stated in the order dated 18th May, 2015 that R2 dealt with the affairs of R1 prejudicial to the interest of the petitioners, this Bench directs Magnum Landcon LLP not to alienate or create thi....
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....ants, before entering into development rights contract with the company, give notice in any newspaper of their intention and called for objection. Mr.Madon on instructions stated that no such notice was given. 11. The status of the application to implead the appellant no.1 as respondent to the company petition is still pending. The appellant no.1 has been directed to file its reply to the application within 15 days and rejoinder, if any, to be filed within 15 days thereafter. In the interregnum the Company Law Board having been satisfied that prima facie it appears that the affairs of company respondent no.3 has been conducted by respondent no.4 in a manner prejudicial to the interest of the company-respondent no.3 and respondent nos.1 & 2 herein and considering the balance of convenience, passed an order as an interim arrangement. An inter locutory remedy is intended to preserve in status-quo, the rights of the parties which may appear on the prima facie examination of a case. Prayer for grant of interlocutory injunction being at a stage when the existence of the legal right asserted by the claimant and its alleged violation are uncertain and remain uncertain till they are establ....
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....edy which is both temporary and discretionary. Referring to the fundamental object of interlocutory injunction, this Court noted with approval that the need for such protection of the plaintiff against injury by violation of his rights must be weighed against the corresponding need of the defendant to be protected against any injury resulting from the restraint on the exercise of his rights, as sought for, which he could not be adequately compensated. The need of one, thus was required to be compared against the other, to determine the balance of convenience to ensure an appropriate exercise of discretion for an interim remedy as suited to a particular fact situation. 49. The unequivocal legal propositions as judicially ordained, to ascertain the emergence and existence of a question of law, the scope of examination thereof by a court of appellate jurisdiction and the balancing of the competing factors in the grant of interlocutory remedy, hallowed by time, indeed are well settled. A question of law, as is comprehended in Section 10F of the Act, would arise indubitably, if a decision which is the foundation thereof, suffers from perversity, following a patent error on a fundamen....
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.... analyse. These too would define the limits of adjudication qua the appellate forum. Whereas in an appeal under Section 10F from an order granting or refusing interim relief, being essentially in the exercise of judicial discretion and based on equity is an appeal on principle and no interference is merited unless the same suffers from the vice of perversity and arbitrariness, such constrictions may not necessarily regulate and/or restrict the domain of examination in a regular appeal on facts and law. Section 10F, thus, statutorily demarcates the contours of the jurisdictional exercise by an appellate forum depending on the nature of the order impugned i.e. interlocutory or final and both cannot be equated, lest the pending proceeding before the lower forum, if the order impugned is purely of interlocutory nature, and does not decide any issue on a consideration of the rival assertions on merits, stands aborted and is rendered superfluous for all intents and purposes. 51........ 52. In the above overwhelming factual premise, the High Court, as the impugned decision would demonstrate, being fully conscious that the proceeding before the CLB was pending for final adjudication,....
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....appreciation of rival assertions and the recorded facts and documents at a later stage. The Company Law Board has passed the order on the basis that there was no entry showing that the money of Rs. 9,51,00,000/- shown as consideration to respondent no.3-company has come into the account of the company. The Company Law Board has also passed the order on the basis that prima facie it was satisfied that respondent no.4 had no authority to create rights in favour of appellants for development of Swami Samarth Nagar and that Respondent no.4 has acted prejudicial to the interest of respondent no.1 & respondent no.2 and also respondent no.3 company. In fact, the Company Law Board has appreciated that the appellant no.1 is required to be shown as a party and to be heard. I do not find any perversity in that order. Until the matter is properly heard, the Company Law Board has passed the interim arrangement order. The counsel for the appellants stated that the appellants have received IOD from the municipal authorities, they have spent lot of money etc. and therefore, the interim order passed by the Company Law Board is hurting them and the balance of convenience is in their favour. But none....